Market Reaction to Tax Changes - Gold prices initially slipped by 1% in Asian trading but later recovered, with spot gold trading near $4,012 an ounce in London [2][4] - The recovery followed Beijing's announcement to limit VAT offsets for gold sourced from the Shanghai Gold Exchange (SGE) and the Shanghai Futures Exchange (SHFE) [2][4] - Under the new rules, producers of non-investment gold can now deduct only 6% of VAT instead of the previous 13% [2][4] Impact on Jewellery Stocks - The tax changes led to a significant decline in jewellery stocks, with Chow Tai Fook Jewellery Group Ltd. dropping as much as 12%, Chow Sang Sang Holdings International Ltd. falling over 8%, and Laopu Gold Co. losing more than 9% [3][4] - Analysts predict that the industry will likely raise prices to pass through the cost pressure resulting from the tax changes [3][4] Investor Sentiment and Market Trends - Despite the turbulence, investor appetite for gold remains strong, with prices still over 50% higher since the start of the year [3][4] - Gold reached an all-time high in October due to a surge in retail buying, and core factors such as central bank purchases and safe-haven inflows continue to support the market [3][4] - The recovery in London trading indicates that bullish sentiment towards gold is still firm, despite concerns about the impact of tax changes in China [3][4][5] Performance of Other Precious Metals - In the broader precious metals market, platinum increased by as much as 2.2%, while silver and palladium also recorded small gains [5]